Are footfall stats as relevant and significant as they once used to be?

Footfall has been a key health barometer for shopping locations but in light of the changing purpose of our shopping places and the rise of leisure uses is it as significant as it once was?

Regularly footfall statistics are published by a number of providers and often there can be differences in numbers and trends, which I presume are a result of differing collection methods, locations and analysis. There have been new entrants in the market as well, namely the mobile phone operators who track every movement of our mobile phones.

I think greater clarity is required as to what is counted, where and how as it is very easy to make broad brush statements about changes in footfall but unless you have carried out consistent counts on a comprehensive scale then it is dangerous to make broad brush statements as to the health of our retail places. As data collectors, aggregators and insight providers this topic is close to my heart and one that I continually strive to ensure is improved in what we analyse and publish. Clarification of the dataset, methodology and update sequence is key for credibility in my view. By way of example the two best known stats that we publish at LDC are vacancy rates and the openings and closures of businesses. In the case of town centres for example, this will be based on either the top 500 or 650 town centres (based on the government’s definition of the retail core of that town not an area we have made up or unilaterally decided to walk). This is then also applied to specified numbers of shopping centres and retail parks that we visit.

Now the important piece from me with data is that it needs to be bottom up and not top down. By this I mean that as we collect data shop by shop then we can roll this up to a street, the town centre, a region and a country. This level of analysis is key if one is to get a true understanding of what changes are taking place.

In days gone by footfall was a key barometer as our only way to feed and clothe ourselves was to visit shops which fifty years ago were only in towns, then we saw the arrival of supermarkets, then the growth of shopping centres and most recently the increasing number and significance of retail (shopping/leisure) parks. Whilst the UK population has increased it has not increased at a level that would not mean that by default footfall would be diluted significantly from town centres to these ‘new’ locations, many of why could be reached by our preferred method of transport – the car! It has therefore always been a surprise to me that certain organisations with responsibility for our towns failed to identify this change and continued to champion the health of towns or that a temporary blip had occurred whilst the reality was structural change and in the case of towns ‘not all boats were rising on the tide’. LDC publishing its vacancy stats from 2009 onwards was very unpopular with some of these organisations as it shined a spotlight on this structural change and only recently has there been official acknowledgement that footfall has declined by c.20% in many town centres. From 100% of spend taking place in town centres to c.50% of spend today it is of no surprise that this has happened and the failure to recognise and manage this decline is the real crime.

On top of these structural changes we saw the arrival of the internet in the 2000’s with internet sales rising exponentially to over 13% today and many top retailers seeing over 25% of their sales coming from online sales fuelled by better retailer websites, connectivity, device ownership and the bricks and clicks relationship being mutually beneficial rather than competitive. The John Lewis Partnership now has 29% of its sales coming from online and the growth of online was +19.5% and in shops +3.5% over the last year. Online sales now deliver sales of £1.1bn from £269m in 2008! The impact of this on footfall is the crux of my question as we know that the majority of people research online, visit stores to see smell, touch and feel the products of interest and then will often use social media to get peer approval and feedback before then heading home and ordering online. Now, here is where the challenge comes because it could be argued that lower footfall may be having higher conversion rates for retailers as consumers are more focused on their shopping trips and not in browse mode as on the past. This means that less visits are required but not less purchases. John Lewis customers who spend £168 online, £264 in shops but £864 if both channels are shopped proves this. How can footfall data account for this change unless we have the golden goose in hand which is spend figures from the banks and credit card providers? Show rooming is the terminology of this fundamental change and my challenge to you as interested parties is how do we marry footfall with spend to create the real profitability and purpose of bricks in this new ‘total retail’ world.

One thought on “Are footfall stats as relevant and significant as they once used to be?

  1. Matthew – a good, well structured piece that covers many of the issues that have been taking place on the high street over the last few decades. I agree. As a basic, single measure footfall could be regarded as a little ambiguous depending on who you get your figures from and how these figures are collated, analysed and presented.
    Assuming that you manage to assess the same set of stats over a period of time I think that footfall indices have been a good way to assess the apparent downward trend in overall shopping footfall patterns in the last decade or so. Therefore it is not all doom and gloom to look at footfall as a basic barometer. On the contrary, you can use it as a ‘yard stick’ upon which to look deeper into the underlying issues.
    But your point about linking the actual spend with footfall is closer to the issue. Marrying customer movement prior to purchase and then seeing the actual conversion rate based on high street footfall, peel off into store, and finally the actual transactions offers a deeper understanding of what is motivating customers and how these are now changing the way that they shop and purchase. Analysing the credit/debit card details with online activity at the same retailer can surely add another dimension to the way that people are shopping a particular retailer. But obviously this does not cover all possible variations of purchase behaviour.
    So, in the case mentioned here, a generic index for footfall isn’t relevant anymore as it offers no real view on what is happening at store level. Whilst marketing director at FootFall in the mid 2000’s I was asked by many people why we did not have a conversion rate index by retail category, as that was seen as a better way for retailers to assess their performance. The answer that we had to give was always the same – unless all retailers play the game there is little chance that we will be able to do this. That would mean all retailers (or at least the major high street names) having a footfall counting system in every store that linked directly to their EPoS which was then centrally collated by an independent organisation that could monitor, crunch and publish the figures. Even with phone, wifi and Bluetooth monitoring/tracking the purchase history is still the unknown.
    So until the retail community find a way to centralise their transaction and purchase details in an anonymous way that can be married to footfall or tracked customer data, in a statistically sound number of stores across the country, then the information will still stay at a retailer level rather than at a town or national level to be used as a barometer to be tracked and monitored.

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